Friday, September 2, 2011

Stocks Plunge After Hiring Halts in August

It was the worst report in 11 months. The unemployment rate held steady at 9.1 percent. It has been above 9 percent in all but two months since May 2009.

US stocks dive after government says that hiring halted in August, adding to recession fears

NEW YORK (AP) -- Stocks plunged Friday after a dismal report on the job market renewed fears of another recession.
No jobs were added in the U.S. last month, the government said early Friday. It was the worst report in 11 months. The unemployment rate held steady at 9.1 percent. It has been above 9 percent in all but two months since May 2009.

"It's certainly ugly," said Jeff Kleintop, chief market strategist at LPL Financial. Kleintop said the report didn't change his view that the economy was headed for a stretch of weak economic growth, not a recession.
Treasury yields fell sharply and gold jumped $48 an ounce as cash flowed into investments seen as less risky than stocks. Overseas markets followed U.S. stocks lower. They were already lower on reports that talks between Greece and international lenders over that country's debt crisis were breaking down.

The Dow Jones industrial average dropped 260 points, or 2.3 percent, to 11,234 at 3:15 p.m. EST. All 30 stocks in the Dow fell. Bank of America Corp. fell the most, 8 percent.
The Standard & Poor's 500 index fell 30, or 2.5 percent, to 1,173. The Nasdaq composite index fell 73, or 2.9 percent, to 2,473.
The losses wiped out most of this week's gains.

The Dow was flat for the week and the S&P 500 was up just 0.2 percent. Stock indexes rose last week for the first time in five weeks.
Volume was thin ahead of the holiday weekend. Stocks fell Thursday, breaking a four-day rally.
The weakness of the Labor Department's closely watched jobs report surprised investors. Previously reported job addition figures for June and July were also revised lower. The average work week declined and hourly earnings fell.

Kleintop said the jobs report was likely skewed by unusual events that may have made employers reluctant to add jobs. The Labor Department's report relies on data collected from surveys of households and businesses in the second week of August. That's right after Standard & Poor's removed the country's AAA credit rating and fears mounted that Europe's banking crisis could spread to the U.S. Television screens were filled with images of riots in London.

"I'm not surprised that businesses weren't doing too much hiring in that environment," Kleintop said.
Cash poured into Treasurys and gold, assets believed to be safer bets during a weak economy. The yield on the 10-year Treasury note fell to 2.01 percent. It was trading at 2.14 percent shortly before the report came out. Bond yields fall when demand for them increases.
The price of gold rose 2.8 percent to $1,880. Fears that a stalling economy could reduce demand for oil and gasoline pushed benchmark crude oil down $2.56, or 2.9 percent, to $86.37.

The VIX, a measure of stock market volatility, rose 4 percent to 33. The index has fallen from a recent high of 48 on Aug. 8, when the Dow lost 634 points following a downgrade of the U.S. government's credit rating. The VIX traded below 20 for most of the year.

Fears of another recession grew last month after markets swung wildly, global growth slowed and Europe's debt crisis appeared to worsen. Consumer confidence plunged in August to a two-year low. A key category that tracks business investment fell sharply in July. Recent data were more encouraging, suggesting weak but steady economic expansion.
European stocks fell as negotiations about Greece's shaky finances appeared to break down. The fell even more after the U.S. jobs report. Germany's DAX closed down 3.4 percent and France's CAC-40 fell 3.6 percent.
Bank of America Corp., the nations' largest bank, sank 8 percent after The Wall Street Journal reported that regulators asked it to develop emergency plans because of its sagging share price and the weakening economy.

Bank of America is down 45 percent this year, largely on concerns about legal costs related to shoddy mortgage investments that it sold.
Other big banks dropped on separate reports that the government is preparing to sue some of them, also over mortgage investments they sold that lost value when the housing market collapsed.
The regulator of Fannie Mae and Freddie Mac, government-controlled mortgage agencies, says banks lied about the quality of loans that they pooled. Goldman Sachs Group Inc. and Morgan Stanley fell 5 percent. Citigroup Inc., Wells Fargo & Co. and JPMorgan Chase & Co. each lost about 4 percent.

Netflix Inc. plunged 9 percent after talks collapsed with a key provider of movies and TV shows. Starz Entertainment said late Thursday that it won't renew a contract that allows Netflix to stream recently released movies and shows.
The Dow, S&P and Nasdaq all had their worst August since 2001 as economic fears and instability in financial markets and European banks added to investors' worries.

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Truth Seeker who has found what he was looking for ... It is all about passionately desiring something then you will find it. Oh yeah, Jesus has returned to earth: divinetruth.com & http://www.youtube.com/user/WizardShak. Also earth changes & financial collapse are coming soon so get prepared & get right with God.